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Strategies & Market Trends : Option Spreads, Credit my Debit -- Ignore unavailable to you. Want to Upgrade?

To: Hectorite who wrote (1050)	12/9/1999 10:01:00 PM
From: KFE	Read Replies (1) \| Respond to of 2317

Hectorite, You are correct that when you exercise an option the premium paid is added to your cost basis. This site is probably the best for tax information on options. cboe.com If you have someone else do your taxes make sure that they have experience with option trades or they will probably make mistakes. Can you think of any other exception to the List Every Transaction Rule? I can't think of any similar to exercise or assignment but if you have any index option positions outstanding at the end of the year they have to be marked to market and treated as if they were liquidated on 12/31. This 12/31 price will now be your new cost basis if you liquidate in 2000. There are many more complications with options and taxes such as anti-straddle rules and constructive and wash sales. The CBOE site should give you a good start. Regards, Ken